Peña Nieto with two signatories to a new accord to support families. At right, the odd man out, Coparmex head de Hoyos Walther.

More poverty due to gas prices: experts

Measures to mitigate effects on families earn harsh criticism from employers' group

Friday, January 13, 2017

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The January 1 increase in gasoline prices could finish up creating a “nation-wide surge of impoverishment.”

That was a warning issued by a group of specialists interviewed by the newspaper El Universal, who said the negative impacts of the so-called gasolinazo will particularly affect people who are on the brink of poverty.

The daily minimum wage of 80.04 pesos, which went up the same day as gas prices, was insufficient considering the fuel price hike, but was a “stillborn” move, as prices of basic goods were already on the rise, said the president of the Institute for Democratic Transition Studies (IETD).

As an example, the price of beans increased by 12% in December. With the inevitable rise brought upon by the new gasoline prices, the minimum wage, which went up 9.6%, is insufficient, said Ricardo Becerra Laguna.

Héctor Villarreal, director of the Center of Economic and Budgetary Studies, said price increases will make the basic basket of goods inaccessible for many families.

“There’s [a part of the] population at risk of falling into poverty, put in a vulnerable position after the change in [gas] prices. I think that around 10 million people are at risk, but it is too soon to say for certain. It would be irresponsible to say that those 10 million will fall into poverty.”

This supposition could well depend on the Bank of Mexico’s interest rate, he added.

The coordinator of the non-governmental organization Citizens’ Action Against Poverty believes that society must demand the government implement measures to keep prices from spiraling out of control.

One such measure materialized in the recently signed Agreement for the Economic Strengthening and Protection of the Family Economy which, although “late and insufficient, shows that if Mexican society demands it, progress can be achieved,” said Rogelio Gómez Hermosillo.

That agreement, signed Monday by President Enrique Peña Nieto and business and labor leaders, sets out several initiatives intended to support Mexican families.

Among them: implement actions that help maintain stable prices of basic goods, modernize public transportation and improve access to credit, encourage investment and employment and strengthen the culture of lawfulness and the rule of law.

Not everyone was on side Monday with the document. One of Mexico’s leading business organizations, Coparmex, refused to sign on the grounds that such an accord required clear objectives and not “an improvised consensus.”

The business group charged that the agreement was incomplete, having been produced in just three days, was not a result of social consensus and included no metrics that would serve to evaluate its results. On top of that, it was delivered to Coparmex only two hours before the official signing.

The document served only as part of a communications strategy intended to improve the government’s image, the organization claimed.

“Coparmex has been recognized by society as the conscience of the private sector. Well then, it is precisely that conscience that today prevents us from subscribing to this improvised, incomplete and insufficient agreement,” said national president Gustavo de Hoyos Walther on Monday.

On Tuesday, Coparmex proposed its own measures, one of which was a one-peso reduction in gasoline prices. Another was the elimination of 37 social programs it says are duplicated.